Who’s Slashing Medicare?

Obamacare would cut the program by $700 billion—but so would Ryan’s budget plan. Can the GOP still scare elderly voters?

GOP vice presidential candidate Paul Ryan speaks during a campaign event at the Waukesha Expo Center on Sunday in Wisconsin.

Photo by Darren Hauck/Getty Images.

The headline at Buzzfeed read “Ryan Skips Florida.” The story, the first of many on a go-go-go weekend—suggested that Mitt Romney’s running mate would be put at a safe, electric-fence distance from senior citizens, lest he give them night terrors about his Medicare plans.

Nine hours later, the Romney-Ryan campaign sent out a schedule alert with a pungent whiff of ahem. “I wanted to advise you that Congressman Ryan will be visiting central Florida next weekend,” wrote campaign spokesman Brendan Buck. “There, he will highlight President Obama’s record of slashing Medicare for current Florida seniors to fund Obamacare.”

The GOP ticket will have to defend Ryan’s budget on at least three fronts. They are: Who gets its tax cuts, who suffers from its spending cuts, and whether or not it “would essentially end Medicare.” That last bit is the most immediately problematic, so the campaign is jujitsu-ing it first. (The “end Medicare” label comes from the news pages of the Wall Street Journal, the paper whose opinion pages have ran thick with pro-Ryan spin.)

The response is a version of the sophisticated parlor game I’m Rubber and You’re Glue. The Affordable Care Act, if implemented, caps the rate of increase in Medicare spending over 10 years to GDP growth plus 0.5 percent. Medicare spending was $499 billion in 2009, and the Congressional Budget Office projects it to hit a post-ACA high $929 billion in 2020. This was expected to mean $450 billion of cuts; some new math suggests it’ll mean $700 billion.

Where will that $700 billion come from? Most of the savings are supposed to come from the Independent Payment Advisory Board, a yet-to-be-staffed agency charged with finding waste. That’s the “death panel” that Sarah Palin, et al, have warned about, sort of, but in the law it’s spelled out that the cuts “shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums.” More savings will come from Medicare Advantage, the prescription drug benefit program that Ryan voted for in 2003—less payment, probably, for a few services, to be determined.

In those ways, some Medicare benefits that currently get covered won’t get covered. And that is how Republicans have toxified Obamacare and turned seniors against it. Michele Bachmann’s presidential campaign, good at rhetoric and straw polls and not much else, referred to this as Barack Obama “stealing” from Medicare. It was a good line! “He stole $700 billion from Medicare to fund Obamacare,” said RNC Chairman Reince Priebus on Sunday. “If any person in this entire debate has blood on their hands in regard to Medicare, it’s Barack Obama. He’s the one that’s destroying Medicare.”

The “Medicare cuts” appeared in tens of millions of dollars worth of 2010 campaign ads. Of course they did. In the past, typically, it was Republicans who’d proposed to cut the rate of growth in Medicare and been called granny-killers. Throwing this back on Democrats was a sweet cosmic revenge—and it worked. No group swung over to the GOP in larger numbers then did voters over 65. In 2008, that bloc narrowly voted for Democratic candidates in House races—49-48, according to exit polling. In 2010*, these same seniors broke 59-38 for the Republicans.

But in 2010, there was no “Paul Ryan budget.” That’s where this gets sticky. Remember, Obamacare is supposed to save $700 billion by capping the rise in Medicare spending from GDP growth plus 0.5 percent. The Ryan budgets in 2012 and 2013 don’t alter Medicare for anyone entering it before 2022—a buffer that lets current retirees breathe easy. After 2022, it turns all of Medicare into a premium support plan like Medicare Advantage. At that point, “an annual competitive bidding process” is supposed to push providers to provide lower rates. “The per capita cost of this reformed program for seniors reaching eligibility after 2023,” explains Ryan in his budget guide, “could not exceed nominal GDP growth plus 0.5 percent.” So, if it works, it’s got the exact same Medicare cap as the Obama plan.

You might expect this to muddle the Romney/Republican argument against Obamacare. It hasn’t. “He’s the only president to cut $500 billion from Medicare,” says Romney on the trail. (Remember, changing calculations could put the size of the cut at $700 billion, but just saying “Obama” and “cut” is usually enough.) Republicans think that the “Obamacare cuts Medicare” issue is so potent that the old Obama numbers among older voters are forever lost to him. “Every bit of polling I’ve seen in Florida, both public and private, shows Florida seniors are scared to death of Obamacare,” says Rick Wilson, a Republican consultant in the state. “They think they’re going to lose their doctors, lose their Medicare Advantage, have lower quality care and be subject to IPAB death panels. Doesn’t matter if it’s true, [it] matters that they believe it.”

That’s the upshot, really—whether voters will break out the calculators and decide which spending cap they like better. It’s a choice. Look back at the article that the Romney campaign sent out yesterday, as it promised that Ryan would campaign in Florida against Obama “slashing Medicare.” It’s a short item, by reporter Marc Caputo, that explains why a video of Obama deputy campaign manager Stephanie Cutter talking about Medicare “cuts” is “reverberating in the conservative blogosphere.”

But that’s not all that Caputo wrote. “Unmentioned” by the meme, he writes, “was that the Ryan plan could also cut as much money.” Details, details. “ObamaCare specifically calls for no reductions in benefits because it’s essentially a defined benefit plan. Ryan calls for a defined contribution plan. And under Ryan’s scenario, there’s a good bet that the contribution won’t be enough to cover health expenses that ObamaCare seeks to guarantee.” The biggest political danger facing Obama’s Medicare plan is that voters won’t understand it. The biggest political danger facing Ryan’s plan is that they will.

Correction, Aug. 13, 2012: The article originally and accidentally referred to the 2008 congressional elections rather than 2010. (Return to the corrected sentence.)